The Iron took the lead through midfielder Josh Wright after 19 minutes, but Darron Gibson levelled for the visitors just five minutes later.
Four goals, all on counter-attacks, saw the Red Devils take control of the match before Martyn Woolford pulled one back.
The goal was the least the Iron deserved, having had more of the ball and creating more opportunities.
"I was delighted with the performance, we had the majority of possession and a lot more chances on goal than they did but there was a difference in the finishing and they were clinical," said Baraclough.
"If you don't do your jobs then you will get hurt and they will hit you straight back. We forgot to vacate areas at times, so we helped them out in the goals. I'm encouraging the team to go forward, but they can't forget their defensive responsibilities.
"We could have scored three or four times before we got the first so I was delighted with that. I'm disappointed with the goals we conceded, they still had to break 60 yards but we vacated the middle area and forgot ourselves - getting a bit caught up in the atmosphere of it all, and wanted to go forward a bit too much.
"We had a great first half and switched off five minutes after scoring and all credit to them [Manchester United], they've come with a decent side and our lads will learn from that."
Mike Phelan was in charge in the visiting dugout, as Manchester United's manager Sir Alex Ferguson was scouting Champions League opponents Valencia.
"I thought Scunthorpe played their part in a very, very good game. They created plenty of opportunities, even when we managed to get it to 5-1 I think we'd had about six chances," he said.
"Overall it's a great scoreline from our point of view because it was a new team out there put together in a couple of days, and Scunthorpe should take a lot of pride and credit from the game."